Honda has put its $15-billion electric vehicle complex in Ontario on hold with no end date. The automaker announced the move on Thursday, the same day it reported a loss for the full year for the first time in its history.
“Based on our revised strategic objectives, we have determined that an indefinite suspension of the value chain project is appropriate at this stage,” Honda said in a statement. “We will continue reviewing our future procurement and business strategies, while carefully monitoring market conditions.”
Japanese media had reported the decision a week earlier. Honda did not confirm it then.
A project that kept shrinking
Honda announced the complex in April 2024 at an event with then-prime minister Justin Trudeau and Ontario Premier Doug Ford. Ottawa and Ontario each said they would put up $2.5 billion. Honda said Thursday it has received none of that money.
The plant could have created about 1,000 manufacturing jobs and built 240,000 vehicles a year once fully running in 2028. Honda had already said the previous May that it was pausing development and would look at the EV market again in two years.
Honda says the pause will not touch jobs or production at its existing plant in Alliston, Ont.
The losses behind it
The company posted a full-year loss of 423.9 billion yen, or $3.68 billion Canadian, and tied it largely to EV plans that did not work out. “EV demand has declined considerably, due to the rollback of environmental regulations in the U.S. and other factors,” Honda said.
Chief executive Toshihiro Mibe said Honda still aims for carbon neutrality. It will put more development and production resources into hybrids to get there.
Greg Layson, digital editor at Automotive News Canada, said many Canadian-built vehicles are sold in the United States, so the Trump administration’s pullback on EV incentives hit Honda hard. American auto tariffs added to the damage. “When you’re losing money in one sense and paying money out the door in another … it’s going to make it really difficult to follow through on $15-billion plans,” he said.
Layson said the pause has no immediate effect on Ontario because current jobs are safe. What it means, he said, is “starting over” on the investment promises.
Reaction in Ottawa and industry
Prime Minister Mark Carney called the announcement “disappointing” at a media conference. He pointed to the worldwide jump in gasoline prices after the oil supply crunch in the Strait of Hormuz and said he did not think the move toward electrification was finished. “The shift towards lower emission vehicles is certainly progressing globally and likely progressing here, but those are choices of Canadians,” he said.
Brendan Sweeney, president and CEO of the Pacific Manufacturing Association of Canada, said many of the cars built at Toyota and Honda plants in Canada are hybrids and “flying off the shelves.” He wants Ottawa to focus on securing a continued free trade deal with the U.S. “These decisions … they’re never made lightly,” Sweeney said. “And it will be a lot easier to make those decisions if we get some clarity on our trade relationship with the United States.”
Sources
Sources
- Honda indefinitely suspends $15B EV plant in Ontario
- Honda EV plant in Canada suspended 'indefinitely'
